Rising energy and gold stocks pushed the Toronto stock market slightly higher Wednesday.
The S&P/TSX composite index edged up 2.27 points to 14,964.64 with the American economy in focus.
The final revision to American economic growth in the first quarter showed that gross domestic product shrank a greater than expected 2.9 per cent. That was larger than the two per cent contraction economists had expected. However, the decline in performance was due in large part to severe winter weather and the damage to the economy was expected to be short-lived.
“Given the influence of temporary factors in Q1, growth should charge back to a 3.8 per cent pace in Q2 as inventory investment bounces back and as spending on consumer goods and business investment re-accelerates,” said BMO Capital Markets economist Aaron Goertzen.
The Canadian dollar ticked up 0.17 of a cent to 93.25 cents (U.S.) as the greenback weakened in the wake of the data.
Other data showed that U.S. durable goods orders fell one per cent during May, against an expected one per cent gain. The drop was driven by sharp drop in demand for military equipment.
U.S. indexes registered minor gains with the Dow Jones industrials ahead 12.75 points to 16,830.88, the Nasdaq was up 7.82 points to 4,358.18 and the S&P 500 index gained 2.43 points to 1,952.41.
Oil gained seven cents to $106.10 (U.S.) a barrel. Prices had risen steadily over the past couple of weeks amid a rising insurgency in Iraq. Prices stepped back over the last two days as fears receded that the insurgency would greatly affect the country’s oil production and exports.
However, U.S. benchmark crude futures rose Wednesday after The Wall Street Journal reported that the U.S. government was loosening a long-standing ban by letting two companies sell American oil internationally. The newspaper said the Obama administration would allow foreign buyers to purchase a type of ultralight oil known as condensate, which can be turned into gasoline, jet fuel and diesel.
The TSX energy sector led advancers, up 0.6 per cent.
The gold sector was ahead 0.17 per cent, while August bullion dropped $4.20 to $1,317.10.
Metal prices were lower with July copper off two cents to $3.14 a pound, leaving the base metals component flat.
Financials and techs led decliners.
The TSX and New York markets finished sharply lower on Tuesday despite strong housing and consumer confidence data.
However, indexes in Toronto and New York are close to record highs and investors wonder where the next catalyst is coming from. Also, inflationary pressures are building, raising concerns about when the Federal Reserve might boost interest rates.
Investors were also prompted to cash in their gains after fresh reports of violence in Iraq, including unconfirmed airstrikes by Syrian warplanes, that raised fears that the conflict could spiral into a broader regional conflict.
On the corporate front, Pengrowth Energy Corp. announced a doubling of the value of its proven reserves at its flagship Lindbergh bitumen project in Alberta from $1-billion to $2-billion (Canadian). Pengrowth shares advanced 20 cents to $7.52.
In the U.S., General Mills Inc. posted quarterly earnings of $404.6-million (U.S.), or 65 cents per share. Excluding one-time items, it earned 67 cents per share, which was below the 72 cents per share Wall Street expected. Total sales declined three per cent to $4.28-billion, which was also below the $4.42-billion analysts expected and its shares fell three per cent to $52.01.